aos3 effects of movement

Question 1

TOT as an AD factor

Answer 1

if increase TOT export prices (price of commodities) increase. therefor the money we get from our exports can buy more imports. increase in price of x increases AD

if a decrease in TOT The money we get from our exports can buy fewer imports. therefor demand, DOWN

Question 2

TOT as an AS factor

Answer 2

cost of production overseas changed import prices and affects cost of production in AUS and therefore AS

price of imports goes up, cost of production goes up, and AS goes down.
price of imports go down, cost of production goes down and AS goes up.

Question 3

exports effect AD (and GDP)
imports effect AS (and production cost)

Question 4

TOT v Balance of goods

Answer 4

TOT- price recieved/ how many imports we can buy for amount of exports

BALANCE- value

Question 5

exchange rates

Answer 5

appreciates (value of AUD)
-exports become more expensive and AD goes down.
-imports become cheaper to buy and aggregate supply goes down

depreciates (value of AUD)
-exports become cheaper, and there is an increase in AD
- imports become more expensive and AS goes down

Question 6

international competetivness

Answer 6

increase in int competitiveness, means an increase in exports, and a decrease in imports. increases AD and therefore economic growth

decrease in int competitiveness means and decrease in exports and an increase in imports. decreasing AD and therefor economic growth